Push for innovation and incentives to transform Australia’s flagging economy

Economists, businesses and think tanks have aligned on calling for innovation to become a top economic priority as new data shows productivity growth flatlined in the year to March 2024.

The Productivity Commission’s latest figures, released on Thursday night, show productivity remained stagnant over the year to March 2024 and is returning to pre-pandemic levels that have long been considered an economic challenge.

This will further significant concern among policymakers about how to drive productivity gains in the economy, following strong remarks from Committee for Economic Development Australia CEO Melinda Cilento on Thursday morning about the urgent need for a “transformation” to get productivity back up closer to 2%.

“We must aspire for more Australian businesses to be at the forefront of global productivity as new opportunities emerge through AI, decarbonisation and the transition to new sources of energy,” Cilento said at the think tank’s State of the Nation event in Parliament House ahead of the latest figures.

“All sectors, all businesses, have to be thinking about how they can double the rate of their product productivity performance, sensing and seizing opportunities to innovate and to transform their businesses,” she said.